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Small agencies lure big biz as large shops trim staffs

Big-name brands generally work with big-name agencies. But the rocky economy and agency-staff reductions are changing that formula as massive marketers increasingly tap tiny shops.

The Joey Co., a five-person agency in Brooklyn, N.Y., is handling the launch of Church & Dwight's Arrid Total-a big switch since Arrid, under former owner Carter Wallace, was handled by Cordiant Communications' Bates Worldwide. Bristol Myers Squibb's Excedrin last month tapped two-man agency Under the Radar, Dobbs Ferry, N.Y., and Westport, Conn., after the giant drugmaker split with Interpublic Group of Cos.' Bozell last year. And Manhattan startup McGarry Bowen last October won branding and corporate-image advertising responsibilities for telecom titan Verizon Communications, an account formerly handled by Interpublic's Lowe, New York.

Mom-and-pop startups have long been a fixture of the ad industry, of course, and historically have been the foundation of numerous now-great global networks.

But today's trend is not only a function of entrepreneurial zeal, though ambition certainly plays a role. A slumping U.S. economy has forced marketers to pare budgets and push their agencies to do more with less. Agencies have axed workers by the thousands and many of those ex-employees have maintained relationships with former clients, thus providing a foundation for new business.

`silver lining'

Technological advances, including the Internet, also make the cost of doing business on a national scale affordable for small-agency operators.

The boon to small agencies "could be seen as a silver lining to an otherwise difficult" time, said Abbott Jones, managing director, AdMedia Partners, New York.

Small agencies that have recently won big-name brands have done so through long long-term relationships with clients as well as being able to show demonstrable success in reaching potential customers through their advertising. Jimmy Cohen, one of the pair that launched Under the Radar in August 2001, was a full-time employee at Bozell in the 1990s, where he wrote a memorable campaign for Excedrin ("Sure, I take Tylenol for aches, pains. But when I have a headache, I take Excedrin").

That familiarity with the brand helped Mr. Cohen and partner Tom Wambauch get an audience with the company's marketing executives last summer.

`ideal' creative

Marketers agree that cost, while rarely the main reason for switching to a smaller agency, can be a factor in their decision to move, since less overhead and fewer employees translate into lower fees.

It can also mean easier access to top-level managers: Joey Cummings, who held senior creative posts at Young & Rubicam, New York, and Leo Burnett, Chicago, and principal of Joey Co. since 1992, is top account director, creative chief and strategic guru for her clients. "Joey is in our offices all the time. She attends every focus group. She reads all the research and presents all the creative," said Henry Kornhauser, VP-creative services at Church & Dwight. "In many ways, she represents the ideal of what people want from their creatives."

Joey Co. handles roughly half of Church & Dwight's $65 million marketing budget. Compared to the amount Church & Dwight spent with its former agency, Partners & Shevack (Mr. Kornhauser, once a principal at his own agency, also worked for Partners & Shevack at one time), "we save about $10 million a year," said Mr. Kornhauser.